Buying your first home in Minnesota: a plain-English guide.
Most of the stress in a first purchase comes from not knowing what happens next. This is the sequence, what each step is for, and where Minnesota does things its own way.
The short answer
Most first-time buyers in Minnesota use a conventional, FHA, VA, or USDA loan, sometimes paired with down payment assistance from Minnesota Housing or a city or county program. Start with a pre-approval, budget for closing costs as well as the down payment, and compare Loan Estimates from more than one lender. BLG Home Mortgage's originators are licensed statewide in Minnesota.
Who counts as a first-time buyer
Most programs, including HUD's definition, treat you as a first-time buyer if you haven't owned a principal residence in the past three years — so a past homeowner can qualify again. Some programs add exceptions, such as for single parents or displaced homemakers who previously owned only with a spouse. Each program sets its own definition, so check the one you're considering.
The steps, in order
- Look at your credit and your monthly budget. Decide on a payment you're comfortable with before a lender tells you what you qualify for.
- Get pre-approved. An originator reviews your income, assets, and credit documents. A pre-approval is stronger than a pre-qualification, but it is not a commitment to lend.
- Complete homebuyer education if your program requires it. Minnesota Housing programs and many assistance programs do.
- Shop and make an offer. Your agent writes the purchase agreement; your originator can issue a letter matched to the offer.
- Inspection and appraisal. The inspection is for you; the appraisal is for the lender.
- Underwriting. Expect requests for updated pay stubs, bank statements, or explanations. Answer quickly.
- Closing. You receive your Closing Disclosure at least three business days before closing. Compare it to your Loan Estimate.
- After closing, file for homestead with your county assessor so the home is taxed as your primary residence.
Which loan fits a first purchase
| Loan | Often a fit when | Guide |
|---|---|---|
| Conventional | Credit is solid; you want mortgage insurance you can remove later. Fannie Mae HomeReady and Freddie Mac Home Possible serve income-eligible buyers. | FAQ |
| FHA | Credit history is thin or bruised, or debt ratios run higher. | FHA guide |
| VA | You're an eligible veteran, service member, or surviving spouse. | VA guide |
| USDA | The home is in an eligible area and household income is under the limit. | USDA guide |
Down payment assistance in Minnesota
Minnesota Housing, the state housing finance agency, offers the Start Up program for first-time buyers and Step Up for repeat and first-time buyers with higher income limits, each with income and purchase price limits. Eligible borrowers can pair them with down payment and closing cost loans such as the Deferred Payment Loan or the Monthly Payment Loan, and Minnesota has offered first-generation homebuyer assistance as well. Many cities and counties run their own programs.
Minnesota Housing programs are delivered through its participating lenders, and program terms, limits, and funding change. Whether a particular program is available on your loan depends on the lender your file is placed with — ask us before you count on it, and confirm current limits at mnhousing.gov. Assistance loans have their own repayment terms, which are disclosed separately.
What to budget beyond the down payment
- Closing costs: lender charges, title and settlement fees, appraisal, recording fees, and Minnesota's mortgage registry tax.
- Prepaids and escrow: homeowners insurance and property tax deposits.
- Inspection, plus radon or well and septic testing where relevant.
- Moving, utilities, and a cushion for the first repairs.
Your Loan Estimate itemizes the lender and settlement costs within three business days of application.
Mistakes that delay first purchases
Opening new credit or financing furniture before closing. Moving large sums between accounts without a paper trail. Changing jobs mid-process without telling your originator. Comparing quoted rates instead of Loan Estimates. None of these are fatal if you flag them early.
Who handles these loans at BLG
U.S. Navy veteran. VA purchase and IRRRL refinances, first-time buyers, conventional, FHA, and USDA.
Profile & licensing · (507) 779-4937Ranked #1 in Minnesota by closed loan units through United Wholesale Mortgage in 2023, 2024, and 2025. Conventional, FHA, VA, USDA, jumbo, construction, self-employed, and non-QM files.
Profile & licensing · (507) 351-0581FHA, VA, USDA, Fannie Mae and Freddie Mac programs, and renovation loans.
Profile & licensingPurchase, refinance, and investment property financing.
Profile & licensingCommon questions
How much do I need saved to buy a first home in Minnesota?
It depends on the loan program, the price, and whether you use down payment assistance. Budget for closing costs, prepaid insurance and taxes, and an inspection in addition to any down payment. A pre-approval conversation gives you a specific number for your situation.
What credit score do I need?
Each program and lender sets its own minimums, and the score also affects pricing. FHA is generally more flexible than conventional, and the VA sets no minimum of its own. We compare lender requirements for your file.
Can family members give me money for the down payment?
Usually, yes. Most programs allow documented gifts from family members, with a signed gift letter and a record of the transfer. Rules on who can give and how much vary by program.
Can I use Minnesota Housing down payment assistance through BLG Home Mortgage?
It depends on whether the wholesale lender your loan is placed with participates in the program at the time. Ask us before you rely on it, and confirm current program terms at mnhousing.gov.
Is a pre-approval a guarantee?
No. A pre-approval means your documents were reviewed. Final approval still depends on the property, the appraisal, underwriting conditions, and no material changes to your finances.
Who at BLG works with first-time buyers?
Steve Lawrence (NMLS #1983107, licensed in Minnesota) works with many first-time buyers, and Brent Busch (NMLS #1626669, licensed in Minnesota, Wisconsin, and Florida) handles them as well. Loan officer assistant Sydney Kraft helps first-time buyers through the paperwork.
Related guides
Official sources
- Minnesota Housing
- CFPB — Buying a house
- CFPB — Find a HUD-approved housing counselor
- Fannie Mae — HomeReady
Last reviewed: September 2026. Program rules change; confirm current requirements with your originator before relying on any detail on this page. Nothing here is a commitment to lend.